UN Secretary General Antonio Guterres is a worried man.
“We must tell it like it is,” the Portuguese told an event hosted by The Economist earlier in March, pointing to the bleak maths around emission trajectories and targets.
Amid the “madness” of continued coal investments and his call for China, India and Indonesia to quit coal by 2040, one line for me stuck out.
“As major economies pursue an “all-of-the-above” strategy to replace Russian fossil fuels, short-term measures might create long-term fossil fuel dependence and close the window to 1.5 degrees,” he said.
The UK is a prime example, the COP26 hosts dancing between going forward on heat pumps, efficiency measures and wind or falling back into the arms of fossil lobbyists.
The government says it is resolutely committed to the UK’s (legally binding) net zero target and investing big on renewables.
But PM Boris Johnson was the latest world leader to mount a dash for gas earlier this month, travelling to the UAE and Saudi Arabia in the hunt for more supplies.
“The energy transition is an issue of national security,” UK energy minister Greg Hands told a recent Chatham House energy conference — a point reinforced by PM Johnson in the Telegraph.
Still, Guterres’ fear is not unfounded, given the power the oil and gas sector wields in Washington DC, London and Brussels — as InfluenceMap revealed last month.
The concept of gas as a ‘bridging’ low carbon fuel has been central to the oil and gas sector’s pitch in the past two decades, squeezing out low carbon alternatives.
The cost of that reliance is now hurting UK consumers: adding £150 a year to bills and forcing the government to kowtow to dubious Middle East regimes.
That’s not to mention the billions that have poured into the Putin regime’s war coffers — funding the violence now inflicted across Ukraine.
And it’s becoming clear that unprovoked war has exposed the UK, EU and the planet to an energy security scramble wrought by decades of fossil fuel lobbying. The 'bridge' is wobbling.
“This is the crisis that kills the idea of gas as a transition fuel,” UCL energy professor and former government advisor Michael Grubb told the same Chatham House event.
Denmark’s climate ambassador Tomas Anker Christensen — citing oil price spikes in 1973 and 2008–09 — was blunt: “We cannot afford a third or fourth fossil fuel crisis,” he said.
Speaking on a panel this week, Christiana Figueres — UN climate boss 2010–2016 — called on leaders to “break the addiction” once and for all. “It is our collective addiction to oil and gas that is financing the war on Ukraine,” she added.
Short term gain, long term pain
There are signs some major economies are getting the message.
In the space of two weeks the EU, Putin’s largest gas export market has turned against him, pledging to cut imports two-thirds and accelerate green energy investments.
Yet while renewables and clean energy seem to be the long term winners, their fate is limited by the necessity to address the issues of today, fuel supplies and costs, increasing inflation and the impacts these might have on the world’s geopolitics.
Meanwhile the actions from the US, EU and UK to protect their own supply lines speaks to a painful fact: we live in a deglobalizing world that’s now turning in on itself.
Just like Covid — when major economies flex their muscles — it’s the world’s poorest who miss out. Commodity costs are surging in Kenya, Uganda and Tanzania; Sri Lanka is struggling to pay for fuel imports; Pakistan’s central bank is warning of “vulnerabilities.”
These are the countries where there’s little social security net, and an economic wobble or extreme weather event can fast lead to poverty spikes and political unrest. They’re also countries which have long asked for more support to build clean energy systems only to be told there is no magic money tree.
“Emerging economies need energy investments accelerated by a factor of seven through 2020s,” IEA chief energy economist Tim Gould told the Chatham House event.
Take Nigeria, whose 2060 net zero target requires 7–6 gigawatts of new power capacity to be added to the grid every year, with a $400 billion bill through to mid-century.
Add to that the 785 million people globally who still have no access to electricity and the 2.6 billion who lack clean cooking options. The IEA’s 2021 Net Zero report reckons this will cost $40 billion a year, equal to around 1% of average annual energy sector investment.
The good news is that we are likely to see a rapid shift in energy investments in rich countries through 2022–2023. The bad is there’s little evidence those countries will look outwards.
And while that probably makes sense politically in the short term, longer term it’s likely to exacerbate an already brutal situation across the developing world, allowing China to set the terms of future fossil fuel dependence.
Finance betrayal
The COP26 summit in Glasgow was the latest in a series of meetings where a 2010 pledge to deliver $100bn a year in climate finance was missed. Yet barely three months later, Germany has found €100 billion for defence spending and the US, UK are others are pumping billions into much-needed arms for Ukraine. To many in the developing world, this detonates the argument that there’s not enough cash. There is. It’s just some crises are viewed as more urgent than others.
It doesn’t have to be this way. A first test of where rich nations are at comes in a few weeks at the IMF / World Bank Spring Meetings, where debt relief and aid for poorer nations is on the agenda.
Working together, G7 governments could start to sketch out a vast clean energy build out: wind towers, solar panels, high volume storage, EVs of all kinds, charging stations, heat pumps while collaborating on sourcing the minerals and rare earths central to clean energy.
Ambitious? Yes. Impossible? No. A greener, safer and more resilient future is a common goal in an all-too-divided world, as Hugh Dixon outlines here. Guterres summed up the alternative only too well in his blistering speech: “Addiction to fossil fuels is mutually assured destruction.”
I’ll leave you with a line from Figueres, who makes a powerful case that in 2022 we’re at a potential inflection point due to Russia’s actions in the past month.
“I see the invasion as the epitome of the abuse of regimes that are using their oil & gas to weaponize and threaten the stability of the rest of the world. The moment has come if we are going to continue to play that game.”
This article first appeared in BusinessGreen here.
